Zhong Guo Zhi Liang Xin Wen Wang·2025-11-11 08:51Core Insights - Starbucks has formed a strategic partnership with the Chinese alternative asset management company Boyu Capital to establish a joint venture for retail operations in China, aiming to expand its store count to 20,000 [1][2] Group 1: Joint Venture Details - Boyu Capital will hold up to 60% equity in the joint venture, while Starbucks retains 40% and continues to own the brand and intellectual property [1] - The joint venture is based on an enterprise value of approximately $4 billion, excluding cash and debt [1] Group 2: Market Context - Since entering China in 1999, Starbucks has seen significant growth, but competition has intensified, with Luckin Coffee surpassing Starbucks in revenue for the first time in Q2 2023 [1][2] - Luckin Coffee reported revenue of 21.2 billion yuan and a net profit of nearly 1.8 billion yuan for the first half of 2025, while Starbucks reported revenue of 18.2 billion yuan and a net profit of approximately 1.2 billion yuan [1][2] Group 3: Expansion Plans - The new joint venture will manage approximately 8,000 existing Starbucks stores in China and plans to expand to 20,000 stores, exceeding the total number of Starbucks locations in North America [2] - In Q4 of fiscal year 2025, Starbucks opened 183 new stores in China and entered 47 new county-level markets [2] Group 4: Challenges Ahead - Achieving the goal of 20,000 stores presents a challenge for Starbucks in balancing expansion speed with service quality, as the company traditionally relies on a direct operation model [3] - The high rental costs associated with the "third space" model may pose challenges in expanding into lower-tier markets while maintaining brand prestige [3]